RCBC thrift unit posts lower profit

MANILA, Philippines - RCBC Savings Bank (RSB) recorded a net income of P856 million as of end September this year, 10 percent lower than the P955 million in the same period last year.

RSB said the drop was anticipated since the strong earnings last year was a result of  non-recurring gains from the sale of a large property.

RSB is the thrift bank subsidiary of the Rizal Commercial Banking Corp. (RCBC), and a member of the Yuchengco Group of Companies (YGC).

RSB president Rommel S. Latinazo said 2011 was an unusual strong year for earnings due to non-recurring profits.

Full year income last year hit a record P1.15 billion, 12.3 percent higher than the P911 million recorded in 2010.

In 2009, net income was recorded at P800 million.

“Excluding this extraordinary gain, our year-to-date 2012 net income represents a 23-percent hike over our regular net income in 2011,” Latinazo added.

Overall, the income growth target for 2012 would be a conservative five percent.

Nonetheless, strong trading gains and a resurgent lending environment took the thrift bank close to its original target.

“Our net income was primarily driven by strong trading gains from the sale of fixed income securities, and a 13-percent increase in our interest income from our growing core consumer loan portfolio,” the chief executive said.

Total loan portfolio grew 17 percent to P33.1 billion, with core consumer loans posting double-digit increases. 

Auto loans expanded 20 percent while home or mortgage loans ballooned 29 percent.

Mortgage loans now account for 48 percent of the total consumer loan portfolio, up from the previous 44 percent in the previous year.

Auto loans slightly increased its share to 42 percent from 41 percent the previous year.

RSB’s aggressive branch expansion also led to nine more branches so far this year and brings the total network to 132.

“We are aiming to raise total branch network to 137 or a total of 14 new branches this year.  In the same period, automated teller machines (ATMs) increased to 266 from 167 at the end of 2011.  Our target is 300 ATMs by year-end,” Latinazo said.

Since 2011, RSB’s focus was the development of the small and medium enterprises (SME), especially in areas outside of Metro Manila with emphasis in urban centers in the Visayas and Mndanao.

“Metro Manila or most of the so-called restricted areas will remain the main domain of our mother unit (RCBC),” he added.

Total assets stood at P57.8 billion by the end of September, almost flat from the P57.3 billion at the same time last year.

Net worth was placed at P7.1 billion from the previous P7.3 billion due to dividends paid to the parent bank.

The thrift bank’s capital adequacy ratio (CAR) stood at a healthy 14.7 percent.